The man who was largely responsible for deciding which developers and properties were allowed to raise money on CrowdStreet has left the real estate crowdfunding platform.
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Ian Formigle, the longtime chief investment officer at CrowdStreet, announced on LinkedIn that he has left the firm to join Portland-based multifamily investor and developer Green Light Development as a partner.
Formigle's departure comes less than a year after CrowdStreet hired a new CEO, John Imbriglia, and as it continues to reckon with the fallout of a $63M fraud perpetrated by Nightingale Properties against the platform's users.
“The company is entering an exciting new chapter with a strong vision and a talented team,” Formigle wrote on LinkedIn. “As a significant equity holder, I’ll continue to cheer them on as they build upon CrowdStreet’s success.”
Formigle and CrowdStreet didn't respond to emails seeking comment. The Real Deal first reported his departure.
Formigle had been with CrowdStreet since its early years, starting as vice president of investments in 2014, two years after the platform’s founding, and rising to CIO in 2019.
Formigle described himself as a “key decision-maker on all the deals that come to the marketplace” in a 2021 Fident Capital podcast. He was instrumental in helping sponsors raise more than $4.3B in equity across more than 800 crowdfunding campaigns, Formigle said on LinkedIn.
Unlike CrowdStreet founder Darren Powderly and longtime CEO Tore Steen, Formigle had years of experience as a commercial real estate executive before joining the platform. Former employees previously told Bisnow that he often had the final say on what deals to put on the platform.
That made him an instrumental figure in the company's darkest hour. He helped to vet and bring in Nightingale, which ultimately raised more than $80M from CrowdStreet customers across three campaigns, including the biggest in the company's history.
Nightingale raised $25M to buy 200 W. Jackson Blvd. in the Chicago Loop in January 2022, then raised $54M a few months later in an attempt to buy a massive office complex in Atlanta known as Atlanta Financial Center.
Nightingale CEO Elie Schwartz pleaded guilty last month to defrauding investors in the AFC deal and a $9M campaign to recapitalize a Miami Beach office building. He awaits sentencing, facing a maximum of 20 years in prison.
So far, CrowdStreet hasn't been publicly linked to any investigations for its role in Schwartz's fraud, but it has been targeted by his victims who are seeking to hold the platform liable. Last year, lawyers representing a dozen investors in Atlanta Financial Center filed an arbitration claim with the Financial Industry Regulatory Authority, seeking more than $3M in damages and an injunction that could effectively stop CrowdStreet from operating.
This month, 125 investors who put equity into 200 W. Jackson filed a claim against CrowdStreet, asking arbitrators to force the platform to cover $7.2M in losses, plus interest, fees and punitive damages, after the platform was accused of ignoring or failing to spot obvious red flags with Nightingale and Schwartz.
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